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World War 1 Centenary

World War I changed everything. From new countries to literature, from tanks to treaties and from flamethrowers to fashion, the conflict is still writ large on our lives 100 years on.

It gave birth to violent dictators and their ideologies but extended the electoral franchise to millions. It ushered in the era of mechanised warfare whilst laying the foundations for modern medicine. Empires crumbled, borders were redrawn, art movements flowered and women won the vote (even if you still had to be over 30 in some countries). Poets committed some of the most memorable imagery in modern verse to paper while a generation of writers would descend on Europe’s war-torn cities and fashion a new style of literature.

After millions of men gave their lives on the battlefields of Europe, it was doubly tragic that a deadly influenza would claim up to 50 million more deaths in the conflict’s immediate aftermath. World War I has given us daylight saving time, Dada, triage, chemical weapons, plastic surgery, fascism and, of course, another war. It invented new forms of killing and unearthed miraculous ways to save lives.

Wall Street Journal editors from around the world have selected 100 legacies that still shape our lives today. History is always open to interpretation, but as the war to end all wars retreats from living history, it feels more important than ever to remember its impact. It is everywhere you look.

Wall Street

by Charles Forelle

Wall Street

World War I brought the curtain down on Britain’s starring role in the global financial system and provided an opening for Wall Street waiting in the wings.

The Federal Reserve Act, passed in 1913, had given U.S. banks the ability to open branches overseas and extend American finance around the globe. It was, Treasury Secretary William McAdoo said, an opportunity “to become the dominant financial power of the world.”

The Great War destroyed the Anglocentric system that had prospered for decades. It would take another war to cement American dominance firmly, but McAdoo was essentially right.

At the end of the 19th century, London was finance and finance was London. Britain had built an unparalleled industrial machine, and industry’s profits nurtured a sophisticated capital market.

The city’s legions of suited and hatted bankers invested Britain’s wealth abroad and financed its expansive global trade. The core of the system was the pound sterling, widely accepted, convertible to gold and unquestionably stable.

“In 1900, London was the financial center—the only financial center,” says Kathleen Burk, a professor emerita at University College London.

The exigencies of war changed everything. Britain needed to pay and equip a massive army, and to do so the country leaned heavily on the United States. By October 1916, some 40% of British war expenditure was going to North America, says Prof. Burk. Britain sold securities, sent £300 million in gold, or nearly $1.5 billion at the time, and borrowed from the U.S.

When the war ended, Britain was a sizeable debtor, largely across the pond. And the international gold standard, with the pound at its center, had come apart. In March 1919, Britain restricted gold exports and the pound slumped against the dollar. Gone forever was its central role in world trade.

“Whereas the pound sterling had been overwhelmingly the dominant reserve currency before 1914, by the 1920s and 1930s you were in a situation—a rather unstable situation—of competition between a number of leading western currencies for that position,” says Prof. David Stevenson of the London School of Economics.

During Britain’s financial weakness, the U.S. had grown its own newly global banking industry. New York banks were financing world trade and borrowing and lending abroad, and although Britain made a brief and painful return to the gold standard between the two world wars, the next system of the world’s money would be built around the dollar.

The Wall Street Journal has selected 100 legacies from World War I that continue to shape our lives today.